___________________________________________________________
AQUILA BIOPHARMACEUTICALS, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
_________________________
Shareholder Rights Agreement
Dated as of May 26, 1998
___________________________________________________________
Table of Contents
Section Page
1 Certain Definitions 1
2 Appointment of Rights Agent 4
3 Issue of Right Certificates 5
4 Form of Right Certificates 6
5 Countersignature and Registration 7
6 Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right
Certificates 8
7 Exercise of Rights; Exercise Price; Expiration
Date of Rights 8
8 Cancellation and Destruction of
Right Certificates 10
9 Reservation and Availability of
Common Stock 10
10 Common Stock Record Date 12
11 Adjustment of Exercise Price, Number and Kind
of Shares or Number of Rights 12
12 Certificate of Adjusted Exercise Price or
Number of Shares 19
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 20
14 Fractional Rights and Fractional Shares 22
15 Rights of Action 22
16 Agreement of Right Holders 23
Section Page
17 Right Certificate Holder Not Deemed
a Shareholder 23
18 Concerning the Rights Agent 24
19 Merger or Consolidation or Change of Name
of Rights Agent 24
20 Duties of Rights Agent 25
21 Change of Rights Agent 27
22 Issuance of New Right Certificates 28
23 Redemption and Termination 28
24 Notice of Certain Events 29
25 Notices 30
26 Supplements and Amendments 30
27 Successors 31
28 Determinations and Actions by the
Board of Directors 31
29 Benefits of this Agreement 32
30 Severability 32
31 Governing Law 32
32 Counterparts 32
33 Descriptive Headings 33
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of May 26, 1998, between Aquila
Biopharmaceuticals, Inc., a Delaware corporation (the "Company"),
and American Stock Transfer & Trust Company, a trust company
organized under the laws of the State of New York (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company authorized
the declaration on May 26, 1998 of a dividend distribution of one
Right (as hereinafter defined) for each outstanding share of
common stock, par value $.01 per share, of the Company (the
"Common Stock") outstanding as of the close of business on June
2, 1998 ("Record Date"), (other than shares of Common Stock held
in the Company's treasury on the Record Date), and contemplates
the issuance of one Right for each share of Common Stock of the
Company issued (whether originally issued or sold from the
Company's treasury) between the Record Date and the earlier of
the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right
to purchase one share of Common Stock of the Company upon the
terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates
(as such term is hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15%
or more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company
(as such term is hereinafter defined), (iii) any employee benefit
plan of the Company or any Subsidiary of the Company (as such
term is hereinafter defined) or (iv) any entity or Person holding
shares of Common Stock organized, appointed or established by
the Company or any Subsidiary for or pursuant to the terms of
any such plan. The Persons described in clauses (i) through (iv)
above are referred to herein as "Exempt Persons." Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Stock by the Company
which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Stock of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Stock of the
Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company,
become the Beneficial owner of any additional shares of Common
Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person".
(b) "Adverse Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
become the direct or indirect Beneficial Owner of 10% or more of
the shares of Common Stock and is deemed by a majority of the
Board of Directors of the Company to be a Person whose ownership
interest would cause a material adverse impact on the business or
prospects of the Company or its shareholders (provided that at
the time of such determination of the Board of Directors there
are then in office not less than five Continuing Directors and
such determination is approved by a majority of the Continuing
Directors then in office).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of this
Agreement; provided, however, that no Person who is a director or
officer of the Company shall be deemed an Affiliate or an
Associate of any other director or officer of the Company solely
as a result of his or her position as director or officer of the
Company.
(d) A Person shall be deemed the "Beneficial owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly,
beneficially owns (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement) or has the right to
dispose of;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
(A) the right to acquire (whether such right is
exercisable immediately or after the passage of time)
pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own,"
(1) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; (2)
securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event; or (3)
securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Sections 3(a), 11(i)
or 22 hereof; or
(B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given
in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act
and (2) is not also then reportable by such person on
Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (B) of
Section 1(c)(ii) hereof) or disposing of any securities of
the Company;
provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial owner of
any securities acquired through such Person's participation as an
underwriter in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition and
(2) no Person who is a director or an officer of the Company
shall be deemed, solely as a result of his or her position as
director or officer of the Company, the Beneficial Owner of any
securities of the Company that are beneficially owned by any
other director or officer of the Company.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in The
Commonwealth of Massachusetts are authorized or obligated by law
or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
p.m., Boston time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., Boston time,
on the next succeeding Business Day.
(g) "Common Stock" shall mean the Common Stock, par value
$.01 per share, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall
mean the capital stock with the greatest voting power, or the
equity securities or other equity interests having power to
control or direct the management, of such Person or, if such
Person is a subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securities or
equity interests.
(h) "Continuing Director" shall mean (i) any member of the
Company's Board of Directors who is not an Acquiring Person or an
Adverse Person or an Affiliate or Associate of an Acquiring
Person or an Adverse Person or a representative or nominee of an
Acquiring Person or an Adverse Person, or any such Affiliate or
Associate and was a member of the Company's Board of Directors
prior to the date of this Agreement, and (ii) any person who
subsequently becomes a member of the Company's Board of Directors
who is not an Acquiring Person or an Adverse Person or Associate
of an Acquiring Person or an Adverse Person or a representative
or nominee of an Acquiring Person or an Adverse Person or of any
such Affiliate or Associate, if such Person's nomination is
recommended or approved by a majority of the Continuing
Directors.
(i) "Distribution Date" shall have the meaning defined in
Section 3(a) hereof.
(j) "Exercise Price" shall have the meaning defined in
Section 7(b) hereof.
(k) "Expiration Date" and "Final Expiration Date" shall
have the meanings defined in Section 7(a) hereof.
(l) "Fair Market Value" of any securities or other property
shall be as determined in accordance with Section 11(d) hereof.
(m) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(n) "Principal Party" shall have the meaning defined in
Section 13(b) hereof.
(o) "Redemption Price" shall have the meaning defined in
Section 23 hereof.
(p) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(q) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(r) "Stock Acquisition Date" shall mean 5:00 p.m. Boston
time the date of the first public announcement (which, for
purposes of this definition shall include, without limitation, a
press release or a report filed pursuant to Section 13(d) under
the Exchange Act) by the Company or an Acquiring Person or an
Adverse Person that an Acquiring Person or an Adverse Person has
become such.
(s) A "Subsidiary" of any Person shall mean any other
Person of which a majority of the voting power of the voting
equity securities or voting interests is owned, directly or
indirectly, by such Person, or which is otherwise controlled by
such Person.
(t) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable. In the event the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall
determine.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of
business on the tenth Business Day after the date that a tender
or exchange offer by any Person, other than an exempt Person, is
first published or sent or given within the meaning of Rule 14(d)-
2(a) of the General Rules and Regulations under the Exchange Act
if, upon consummation thereof, such Person would be an Acquiring
Person or an Adverse Person (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights) (the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by
certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one
or more certificates, in substantially the form of Exhibit A
hereto (the "Right Certificates"), evidencing one Right for each
share of Common Stock so held. As of and after the close of
business on the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) Not later than ten days after the Record Date, the
Company will send a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common
Stock with or without a copy of the Summary of Rights attached
thereto, and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until
the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the transfer of any of the
certificates for the Common Stock outstanding on the Record Date,
even without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
(c) Certificates for the Common Stock issued after the
Record Date, but prior to the earlier of the Distribution Date or
the Expiration Date, shall be deemed also to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set forth in
a Shareholder Rights Agreement between Aquila
Biopharmaceuticals, Inc. (the "Company") and
American Stock Transfer & Trust Company, as Rights
Agent, dated as of May 26, 1998 (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal offices of Aquila
Biopharmaceuticals, Inc. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. The Company may
redeem the Rights at a redemption price of $0.01
per Right, subject to adjustment, under the terms
of the Rights Agreement. The Company will mail to
the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written
request therefor. Under certain circumstances,
Rights issued to Acquiring Persons or Adverse
Persons or any Affiliates or Associates thereof (as
defined in the Rights Agreement) and any subsequent
holder of such Rights may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of the Distribution Date or the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. In the event
that the Company purchases or acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock
which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment and certification to be printed
on the reverse thereof) shall each be substantially in the form
of Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law, rule or regulation or
with any rule or regulation of any stock exchange or market on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Right Certificates, whenever distributed, shall be
dated as of the Record Date, and on their face shall entitle the
holders thereof to purchase such number of shares of Common Stock
as shall be set forth therein at the price set forth therein (the
"Exercise Price"), but the number of such shares and the Exercise
Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by
(i) an Acquiring Person or an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any
Associate or Affiliate of an Acquiring Person or an Adverse
Person) who becomes a transferee after the Acquiring Person or
the Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate of an Acquiring Person or an Adverse Person) who
becomes a transferee prior to or concurrently with the Acquiring
Person or the Adverse Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or the Adverse Person to
holders of equity interests in such Acquiring Person or such
Adverse Person to any Person with whom the Acquiring Person or
the Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of Section 7(e) hereof,
and any Right Certificate issued pursuant to Section 6 or Section
11 upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Adverse Person
or an Affiliate or an Associate of an Acquiring
Person or an Adverse Person (as such terms are
defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may
become null and void under certain circumstances as
specified in Section 7(e) of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after
it becomes aware of the existence and identity of any Acquiring
Person or any Adverse Person or any Associate or Affiliate
thereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of
the Company by its President or any Vice President and by its
Secretary or any Assistant Secretary, either manually or by
facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the
Secretary or any Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company; such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by
the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates may be signed
on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices designated as the
appropriate place for surrender of Right Certificates upon
exercise or transfer, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business
on the Expiration Date, any Right Certificate or Certificates may
be transferred, split up, combined or exchanged for another Right
Certificate or Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock (or following a
Triggering Event, Common Stock, preferred stock, cash, property,
debt securities or any combination thereof) as the Right
Certificate or Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of
assignment and certificate duly executed, at the office or
offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall
have completed and signed the certificate contained in the form
of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Certificates,
as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security satisfactory
to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for counter
signature and delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part
at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the
Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the
aggregate Exercise Price for the total number of shares of Common
Stock (or other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then exercised, at or
prior to the earlier of (i) the close of business on June 2, 2008
(the "Final Expiration Date") or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) or (ii) being herein referred to as the "Expiration
Date"). Except as set forth in Section 7(e) hereof and
notwithstanding any other provision of this Agreement, any Person
who prior to the Distribution Date becomes a record holder of
shares of Common Stock may exercise all of the rights of a
registered holder of a Right Certificate with respect to the
Rights associated with such shares of Common Stock in accordance
with the provisions of this Agreement, as of the date such Person
becomes a record holder of shares of Common Stock.
(b) The Exercise Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $50.00;
shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) hereof and shall be payable in
lawful money of the United States of America in accordance with
Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side thereof duly executed,
accompanied by payment of the Exercise Price for the shares to be
purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash or by certified check or
bank draft payable to the order of the Company, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of Common Stock (or make
available, if the Rights Agent is the transfer agent therefor)
certificates for the number of shares of Common Stock to be
purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if
any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt
of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt promptly deliver
such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to
issue other securities of the Company, pay cash or distribute
other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities,
cash or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person or the Adverse Person becomes such or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or the Adverse Person
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person or the Adverse Person to holders of equity interests in
such Acquiring Person or such Adverse Person or to any Person
with whom the Acquiring Person or the Adverse Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or
other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or an Adverse
Person or any Affiliates or Associates thereof or any transferee
of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company-shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company shall use its best efforts to cause to be
reserved and kept available out of its authorized and unissued
shares of Common Stock or any authorized and issued shares of
Common Stock held in its treasury, the number of shares of Common
Stock that will be sufficient to permit the exercise in full of
all outstanding and exercisable Rights.
(b) The Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
of Common Stock issued or reserved for issuance to be listed,
upon official notice of issuance, upon the principal national
securities exchange, if any, upon which the Common Stock is
listed or, if the principal market for the Common Stock is not on
any national securities exchange, to be eligible for quotation on
the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the
occurrence of a Section 11(a)(ii) Event as of which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as required by law following the Distribution
Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may
temporarily suspend for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and
permit it to become effective. Upon such suspension, the Company
shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. Notwithstanding any such provision of this Agreement to
the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
Common Stock delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Exercise Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any certificates for
shares of Common Stock upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or in respect of the
issuance or delivery of securities in a name other than that of,
the registered holder of the Right Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates
for securities in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for Common Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Stock
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day
on which the Common Stock transfer books of the Company are open.
Prior to the exercise of the Right evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind
of Shares or Number of Rights. The Exercise Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Common Stock payable in shares of Common Stock, (B)
subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Exercise Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of
the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that any Person, alone or together
with its Affiliates and Associates, shall become an
Acquiring Person, or an Adverse Person, unless the event
causing such Person to become an Acquiring Person, or an
Adverse Person, is a transaction set forth in Section 13(a)
hereof or is an acquisition of shares of Common Stock
pursuant to a cash tender offer made pursuant to Section
14(d) of the Exchange Act for all outstanding shares of
Common Stock (other than shares of Common Stock beneficially
owned by the Person making the offer or by its affiliates or
associates) at a price and on terms determined by at least a
majority of the Continuing Directors who are not employees
of the Company, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair
to stockholders (taking into account all factors which such
members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best
interests of the Company and its stockholders, proper
provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter
have a right to receive, upon exercise thereof at the then
current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x)
multiplying the then current Exercise Price by the then
number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event and dividing that product by (y) 50%
of the Fair Market Value per share of the Common Stock
(determined pursuant to Section 11(d)) on the date of the
occurrence of any one of the events listed above in this
Section 11(a)(ii) (such number of shares is herein called
the "Adjustment Shares"); provided, however, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 shall apply
and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that the number of shares of
Common Stock that are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved
for issuance for purposes other than upon the exercise of
Rights shall not be sufficient to permit the exercise in
full of the Rights in accordance with the foregoing Section
11(a)(ii), the Company shall (A) determine the excess of (1)
the Fair Market Value, as determined in accordance with
Section 11(d) hereof as of the Section 11(a) Trigger Date
(as such term is defined below), of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value")
over (2) the Exercise Price (such excess is herein called
the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares,
upon exercise of the Rights, (1) cash, (2) a reduction in
the Exercise Price, (3) Common Stock or other equity
securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock or other
securities which the Board of Directors of the Company has
deemed to have the same value as shares of Common Stock
(such shares or units or shares of preferred stock are
herein called "common stock equivalents"), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a Fair Market Value
equal to the Current Value; provided, however, if the
Company shall not have made adequate provision to deliver
the Current Value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein
as the "Section 11(a) Trigger Date"), then the Company shall
be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Exercise Price,
shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and cash have an aggregate
Fair Market Value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after
the Section 11(a) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need
be taken pursuant to the first or second sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares or to decide the appropriate form of
distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect.
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or
purchase Common Stock or common stock equivalents or securities
convertible into Common Stock or common stock equivalents at a
price per share of Common Stock or per share of common stock
equivalents (or having a conversion price per share, if a
security convertible into Common Stock or common stock
equivalents) less than the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per share of Common Stock on
such record date, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares
of Common Stock which the aggregate offering price of the total
number of shares of Common Stock to be offered (and the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Fair Market Value and the
denominator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of
additional shares of Common Stock and common stock equivalents to
be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be the Fair Market
Value thereof determined in accordance with Section 11(d) hereof.
Shares of Common Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
rights or warrants are not so issued, the Exercise Price shall be
adjusted to be the Exercise Price which would then be in effect
if such record date had not been fixed.
(c) If the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular periodic
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common Stock,
but including any dividend payable in stock other than Common
Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Exercise Price to be in effect
after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the Fair Market Value
(as determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, less the Fair Market Value (as
determined pursuant to Section 11(d) hereof) of the portion of
the cash, assets or evidences of indebtedness so to be
distributed or of such convertible securities, subscription
rights or warrants applicable to one share of Common Stock and
the denominator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per share of Common
Stock on such record date. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Exercise Price
shall again be adjusted to be the Exercise Price which would be
in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market
Value" of any share of Common Stock or any other stock or any
Right or other security or any other property shall be determined
as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other
security, the Fair Market Value on any date shall be deemed
to be the average of the daily closing prices per share of
such stock or per unit of such other security for the 30
consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, provided, however,
that in the event that the Fair Market Value per share of
any share of Common Stock is determined during a period
following the announcement by the issuer of such Common
Stock of (x) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of such Common Stock or (y) any
subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the 30 Trading Day
period after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the Fair Market Value shall be properly adjusted to
take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if
the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if
not so quoted, the average of the last quoted high bid and
low asked prices) in the over-the-counter market, as
reported by NASDAQ or such other system then in use; or, if
on any such date no bids for such security are quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in such security selected by the Board of Directors
of the Company. If on any such date no market maker is
making a market in such security, the Fair Market Value of
such security on such date shall be determined reasonably
and with utmost good faith to the holders of the Rights by
the Board of Directors of the Company, including, if at the
time of such determination there is an Acquiring Person or
an Adverse Person, a majority of the Continuing Directors
then in office, or if there are no Continuing Directors, by
a nationally recognized investment banking firm selected by
the Board of Directors, which determination shall be
described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the
Rights. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which such
security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed
or admitted to trading on any national securities exchange,
a Business Day.
(ii) If a security is not publicly held or not so
listed or traded, "Fair Market Value" shall mean the fair
value per share of stock or per other unit of such security,
determined reasonably and with utmost good faith to the
holders of the Rights by the Board of Directors of the
Company, including, if at the time of such determination
there is an Acquiring Person or an Adverse Person, a
majority of the Continuing Directors then in office, or if
there are no Continuing Directors, by a nationally
recognized investment banking firm selected by the Board of
Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights.
(iii) In the case of property other than
securities, the Fair Market Value thereof shall be
determined reasonably and with utmost good faith to the
holders of Rights by the Board of Directors of the Company,
including, if at the time of such determination there is an
Acquiring Person or an Adverse Person, a majority of the
Continuing Directors then in office, or if there are no
Continuing Directors, by a nationally recognized investment
banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with
the Rights Agent and shall be binding upon the Rights Agent
and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Exercise Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3) years from the
date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of any provision of Section 11(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company
other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect
to the Common Stock contained in Section 11(a), (b), (c), (e),
(g) through (k) and (m), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise Price,
the number of shares of Common Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise
Price as a result of the calculations made in Section 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Exercise Price, that number of shares of Common
Stock (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares of Common Stock for which a
Right may be exercisable immediately prior to this adjustment by
(y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights,
in substitution for any adjustment in the number of shares of
Common Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing
the Exercise Price in effect immediately prior to adjustment of
the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Company shall make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Exercise Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Exercise Price or the number of shares of Common Stock issuable
upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Exercise Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then stated value, if any,
of the number of shares of Common Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of
any Right exercised after such record date the number of shares
of Common Stock or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that (i) any consolidation or subdivision of
the Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the Fair Market Value, (iii) issuance
wholly for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of
Common Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock,
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with, (ii)
merge with or into, or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series
of related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole to, any other Person or Persons if
(x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other
instruments outstanding or agreements or arrangements in effect
which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale the shareholders of a Person who constitutes, or
would constitute, the "Principal Party" for the purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates. The Company further covenants and agrees that after
the Distribution Date it will not, except as permitted by Section
23 or Section 26 hereof, take (or permit any Subsidiary to take)
any action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Record Date and prior to the Distribution Date (i)
declare or pay any dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event
by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to the
occurrence of such event and the denominator of which shall be
the number of shares of Common Stock outstanding immediately
following the occurrence of such event.
(q) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the
extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Rights Agreement, including
the rights represented by Section 13.
Section 12. Certificate of Adjusted Exercise Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11, Section 13 or Section 23(d) hereof, the Company shall
(a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on any such certificate
and on any adjustment contained therein and shall not be deemed
to have knowledge of any such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which is not prohibited by Section 11(n) hereof)
shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger,
all or part of the shares of Common Stock shall be changed into
or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of
which is not prohibited by Section 11(n) hereof), then, and in
each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof,
shall have the right to receive, upon the exercise thereof at the
then current Exercise Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully
paid and nonassessable shares of freely tradeable Common Stock of
the Principal Party (as hereinafter defined in Section 13(b)),
free and clear of rights of call or first refusal, liens,
encumbrances or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Exercise
Price by the number of shares of Common Stock for which a Right
is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying
the number of such shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event) by the Exercise Price in effect immediately prior to such
first occurrence, and dividing that product by (2) 50% of the
Fair Market Value (determined pursuant to Section 11(d) hereof)
per share of the Common Stock of such Principal Party on the date
of consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to
such Principal Party; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock to permit
exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (x) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other
Person; and (y) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value of shares
outstanding.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto (x)
the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and (y) the Company and each
Principal Party and each other Person who may become a Principal
Party as a result of such consolidation, merger, sale or transfer
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in Section 13(a), the Principal
Party at its own expense will
(i) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may
be necessary or appropriate;
(iii) use its best efforts to list (or continue
the listing of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities
exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
If any Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have
not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the
Fair Market Value of a whole Right, as determined pursuant to
Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the Fair Market
Value of a share of Common Stock. For purposes of this Section
14(b), the Fair Market Value of a share of Common Stock shall be
determined pursuant to Section 11(d) hereof for the Trading Day
immediately prior to-the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Right
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person
subject to this Agreement. Holders of Rights shall be entitled
to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the
provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer
of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as the result
of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of
such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of Common Stock or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as
provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for
herein shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate
for Common Stock or other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person or any Adverse Person and the
determination of "Fair Market Value") be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person
believed by the Rights Agent to be the President, a Vice
President, the Treasurer, any Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company and delivered to the
Rights Agent. Any such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 7(e) hereof) or any adjustment required under
the provisions of Sections 11, 13 or 23(c) hereof or responsible
for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate
describing any such adjustment furnished in accordance with
Section 12 hereof), nor shall it be responsible for any
determination by the Board of Directors of the Company of current
market value of the Rights or Common Stock pursuant to the
provisions of Section 14 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Common Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision
hereof from any person believed by the Rights Agent to be the
President, a Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of the
Company, and is authorized to apply to such officers for advice
or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.
Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal
included in such application on or after the date specified in
such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the
holders of the Rights resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur
liability in the performance of any of its duties any financial
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock, by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or
without cause) upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent
Rights Agent or the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the
United States or of The Commonwealth of Massachusetts or the
State of New York (or of any other state of the United States so
long as such corporation is authorized to do business as a
banking institution in The Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under
such laws to exercise stock transfer or corporate trust rowers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with
the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereafter issued
by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be
issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to
whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that,
appropriate adjustments shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right, subject to
adjustments as provided in Section 23(d) hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
The Rights may not be redeemed at any time after the earliest of
5:00 p.m., Boston time, on (i) the tenth day after the Stock
Acquisition Date, (ii) the date on which a Section 13 Event
occurs, or (iii) the Final Expiration Date. The Rights may not
be redeemed at any time while there is an Acquiring Person or an
Adverse Person or at any time on or after the date of a change
(resulting from one or more proxy or consent solicitations) in a
majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such
solicitation a majority of the Board of Directors of the Company
has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such person becoming an
Acquiring Person or an Adverse Person or which would cause the
occurrence of a Triggering Event unless there are Continuing
Directors then in office and redemption of the Rights is
authorized by the Board of Directors, including at least a
majority of the Continuing Directors.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, and without
any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
the Rights Agent and to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23, or in connection with
the purchase, acquisition or redemption of shares of Common Stock
prior to the Distribution Date.
(c) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the Fair Market
Value of the Common Stock as of the time of redemption) or any
other form of consideration deemed appropriate by the Board.
(d) In the event the Company shall at any time after the
date of this Rights Agreement (i) pay any dividend on Common
Stock in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock into a greater number of shares or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares of the outstanding shares of Common Stock, then
and in each such event the Redemption Price after such event
shall equal the Redemption Price immediately prior to such event
multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately prior to such
event and the denominator of which is the number of shares of
Common Stock outstanding immediately after such event; provided,
however, that in each case such adjustment to the Redemption
Price shall be made only if the amount of the Redemption Price
shall be reduced or increased by $0.001 per Right.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular
periodic cash dividend out of earnings or retained earnings of
the Company), or (ii) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Common Stock), or (iv) to effect any consolidation or
merger into or with, or to effect any sale, mortgage or other
transfer (or to permit one or more of its Subsidiaries to effect
any sale, mortgage or other transfer), in one transaction or a
series of related transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person (other than a Subsidiary of the
Company in one or more transactions each of which is not
prohibited by Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such
date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders
of the shares of Common Stock for purposes of such action, and in
the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of
Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, the Company shall as soon as practicable
thereafter give to each registered holder of a Right Certificate,
in accordance with Section 25 hereof, a notice of the occurrence
of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Aquila Biopharmaceuticals, Inc.
000 Xxxxxxxxxx Xxxxxx
Biotechnology Research Park
Worcester, Massachusetts 01605
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
American Stock Transfer & Trust Company
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement as the Company may deem necessary or desirable without
the approval of any holders of certificates representing shares
of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holder of Right Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder
(which shortening or lengthening shall be effective only if there
are Continuing Directors then in office and shall require the
concurrence of such Continuing Directors if (A) such supplement
or amendment occurs at or after the time a Person becomes an
Acquiring Person or an Adverse Person or (B) such supplement or
amendment occurs on or after the date of a change (resulting from
one or more proxy or consent solicitations) in a majority of the
directors then in office at the commencement of such solicitation
if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a
majority of the Board of Directors of the Company has determined
in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person or
an Adverse Person or which would cause the occurrence of a
Triggering Event), or (iv) to change or supplement the provisions
hereof in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person
or an Adverse Person or any Affiliate or Associate of an
Acquiring Person or an Adverse Person); provided, however, that
this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and the benefits to, the
holders of Rights. Upon the delivery of such certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made on or
after the Distribution Date which changes the Redemption Price,
the Final Expiration Date, the Exercise Price or the number of
shares of Common Stock for which a Right is exercisable or which
affects any right vested in the Rights Agent. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock.
Section 27. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of
Directors. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect
on the date hereof. The Board of Directors of the Company (with,
where specifically provided for herein, the concurrence of the
Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board (with, where
specifically provided for herein, the concurrence of the
Continuing Directors) or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors (or,
where specifically provided for herein, by the Continuing
Directors) in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject any member of
the Board of Directors or any of the Continuing Directors to any
liability to the holders of the Rights or to any other person.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
(including, if at the time of such determination, there is an
Acquiring Person or an Adverse Person, a majority of the
Continuing Directors then in office) determines in its good faith
judgment that severing the invalid language from the Agreement
would adversely affect the purpose or effect of the Agreement,
the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the
Board of Directors.
Section 31. Governing Law. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and to
be performed entirely within Delaware.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
[Corporate Seal]
ATTEST: AQUILA BIOPHARMACEUTICALS, INC.
By__________________________ By____________________________
Name: Xxxxxx Xxxxxxx-Xxxxx
Title: President and
Chief Executive Officer
[Corporate Seal]
ATTEST: AMERICAN STOCK TRANSFER & TRUST
COMPANY
By__________________________ By____________________________
Name:
Title:
Exhibit A
[Form of Right Certificate]
Certificate No. R- __________
Rights
NOT EXERCISABLE AFTER JUNE 2, 2008 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. (UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID].
(THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID UNDER CERTAIN
CIRCUMSTANCES AS SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.
Right Certificate
AQUILA BIOPHARMACEUTICALS, INC.
This certifies that ______________________, or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Shareholder Rights
Agreement dated as of May ___, 1998 (the "Rights Agreement")
between Aquila Biopharmaceuticals, Inc. (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to
the close of business on June 2, 2008 at the office or offices of
the Rights Agent designated for such purpose, or its successors
as Rights Agent, one fully paid, non-assessable share of the
Common Stock (the "Common Stock") of the Company, at a purchase
price of $____ per share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase and the related Certificate duly
executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of
__________.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Right Certificate are beneficially owned by (i) an
Acquiring Person or an Adverse Person, or an Affiliate or
Associate of any such Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person
or any such Adverse Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a
transferee of a Person who, after such transfer, became an
Acquiring Person or an Adverse Person, or an Affiliate or
Associate of an Acquiring Person or an Adverse Person, such
Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Common Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby-incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
offices of the Company and the Rights Agent and are also
available upon written request to the Company or the Rights
Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights
evidenced by the Right Certificate or Certificates surrendered
shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Board
of Directors of the Company at its option at a redemption price
of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
No fractional shares of stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Common Stock or any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
(Corporate Seal]
Attested: AQUILA BIOPHARMACEUTICALS, INC.
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx Xxxxxxx-Xxxxx
By________________________ By______________________________
Secretary Name: Xxxxxx Xxxxxxx-Xxxxx
Title: President
(Corporate Seal]
Attested: AMERICAN STOCK TRANSFER & TRUST
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
By________________________ By______________________________
Assistant Secretary Name: Xxxxxxx X. Xxxxxx
Title: Vice President
(Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________________________
hereby sells, assigns and transfers unto
___________________________________________________________
(Please print name and address of transferee)
___________________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ________________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ____________________, 19__
_________________________________
Signature
Signature Guaranteed: ________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ______
are ______ are not being transferred by or on behalf of a Person
who is or was an Acquiring Person or an Adverse Person, or an
Affiliate or Associate of an Acquiring Person or an Adverse
Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ______ did ______ did not directly
or indirectly acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring
Person or an Adverse Person, or an Affiliate or Associate of an
Acquiring Person or an Adverse Person.
Dated:____________, 19__ ________________________________
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: Aquila Biopharmaceuticals, Inc.
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to
purchase the shares of Common Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number: ___________________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number: ___________________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
Dated: ____________________, 19__
______________________________
Signature
Signature Guaranteed: _________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ________
are ________ are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Adverse Person, or an
Affiliate or Associate of an Acquiring Person or an Adverse
Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned _____ did _____ did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of an Acquiring
Person or an Adverse Person.
Dated: ____________, 19__ _______________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Exhibit B
AQUILA BIOPHARMACEUTICALS, INC.SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
The Board of Directors of Aquila Biopharmaceuticals, Inc.
(the "Company") declared a dividend distribution of one common
stock Stock Purchase Right (the "Right(s)") for each outstanding
share of common stock of the Company to stockholders of record at
the close of business on June 2, 1998. Each Right entitles the
registered holder to purchase from the Company one share of
common stock, par value $.01 per share (the "Common Stock"), at a
cash Exercise Price of $50.00 per share, subject to adjustment.
The description and terms of the Rights are set forth in a
Shareholder Rights Agreement dated as of May 26, 1998 between the
Company and American Stock Transfer & Trust Company, as Rights
Agent.
Initially, the Rights will not be exercisable and will be
attached to all outstanding shares of Common Stock. No separate
Right Certificates will be distributed until the Distribution
Date. The Rights will separate from the Common Stock and become
exercisable and the Distribution Date will occur upon the
earliest of (i) 10 days following a public announcement that
either: (x) a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15%
or more of the outstanding shares of Common Stock or (y) a person
or group of affiliated or associated persons (an "Adverse
Person") has acquired beneficial ownership of 10% or more of the
outstanding shares of Common Stock and such person(s) is deemed
by a majority of the Board of Directors of the Company to be a
person(s) whose ownership interest would cause a material adverse
impact on the business or property of the Company or its
shareholders (the date of said announcement being referred to as
the "Stock Acquisition Date"), or (ii) 10 business days following
the commencement of a tender offer or exchange offer that would
result in a person or group becoming an Acquiring Person or an
Adverse Person.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (a) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (b) new Common Stock
certificates issued after June 2, 1998 will contain a notation
incorporating the Shareholder Rights Agreement by reference, and
(c) the surrender for transfer of any certificates for Common
Stock will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on June 2, 2008, unless
previously redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Right
Certificates will be mailed to holders of record of Common Stock
as of the close of business on the Distribution Date and,
thereafter, the separate Right Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction or (ii) 50% or more of the
Company's assets or earning power is sold, each holder of a Right
shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a market value equal to two
times the exercise price of the Right. In the event that a
person or group becomes an Acquiring Person or an Adverse Person,
proper provision will be made so that after the Distribution Date
each holder of a Right will thereafter have the right to receive
upon exercise shares of Common Stock or other securities or
property of the Company having a market value of two times the
exercise price of the Right. Rights that are or were
beneficially owned by an Acquiring Person or an Adverse Person
may (under certain circumstances specified in the Shareholder
Rights Agreement) become null and void.
The Exercise Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible
securities at less than the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common
stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Exercise Price
will be required until cumulative adjustments amount to at least
1% of the Exercise Price. The Company is not obligated to issue
fractional shares of Common Stock and, in lieu thereof, an
adjustment in cash may be made based on the fair market value of
the Common Stock on the last trading date prior to the date of
exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors) by
the Board of Directors at any time prior to the tenth day after
the Stock Acquisition Date and, under certain circumstances, at
subsequent times. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and thereafter the only right of the holders of Rights
will be to receive the redemption price.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company at any time prior to the
Distribution Date. From and after the Distribution Date, the
Board of Directors of the Company may, subject to certain
limitations specified in the Rights Agreement, amend the Rights
Agreement to cure any ambiguity, defect or inconsistency, to
shorten or lengthen any time period under the Rights Agreement,
or to make other changes that do not adversely affect the
interests of the Rights holders (excluding the interests of
Acquiring Persons, Adverse Persons or their Affiliates or
Associates).
Until a Right is exercised, the holder will have no rights
as a stockholder of the Company (beyond those as an existing
stockholder), including the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in'
the event that the Rights become exercisable for shares of Common
Stock (or other consideration) of the Company or for common stock
of an acquiring company as set forth above.
A copy of the Shareholder Rights Agreement has been filed
with the Securities and Exchange Commission as an Exhibit to a
Current Report on Form 8-K dated May 26, 1998. A copy of the
Shareholder Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to
the Shareholder Rights Agreement.
